Winsupply Takes Disciplined Approach to Inventory Management, Forecasting and Talent Development

• Local owners reacted quickly to pandemic-related supply chain disruptions, helping Winsupply to have a strong 2020.

• The company is investing in a new Oklahoma City-based distribution center to expand its footprint.

• A new executive development program will promote a stronger internal talent pipeline.

Winsupply had a banner year in 2020, thanks to its structure and philosophy, says President John McKenzie. Named to his position in March of last year as the COVID-19 pandemic hit, McKenzie is proud of what he called the construction and industrial supply distributor’s ability to adapt on the fly once the pandemic hit.

Winsupply’s local owners reacted quickly to the changing micro-economies during the pandemic by sourcing materials independently, according to McKenzie. The Dayton, Ohio-based distributor also benefitted from serving several verticals that have prospered during the pandemic, including HVACR, plumbing and heating and electrical. 

Winsupply (No. 9 on MDM’s 2021 Top Distributors Top 40 overall list) is now bulking up its inventory, and its strong supplier partnerships continue to play a key role. “We’re forecasting better than we’ve ever done before, especially in equipment lines where you’ve got furnaces and AC units and water heaters. We’re getting pretty disciplined from a collective perspective about thinking through forecasting and communicating that repeatedly with our supplier partners so there are no surprises. With local owners, there’s the ability to react swiftly to the micro-economy that they’re working in,” says McKenzie, who has been with the company for 25 years.

HVACR picks up

With summer heat waves roiling in, McKenzie says Winsupply’s HVACR business “is greater than it’s ever been.” For that reason, Winsupply is in the process of expanding its HVACR business — opening several HVACR distributorships this year. “We don’t see that slowing down at all,” he says. “The lead times are anywhere from 12-15 weeks on products, and that’s not just us, that’s kind of all over. It’ll be interesting come August when people start forecasting for the furnace season and what the suppliers end up doing. A lot of the HVAC suppliers have constraints around steel prices, and are hedging bets on what steel inflation looks like, too.”

With Winsupply’s HVACR business undergoing a growth spurt in 2021, McKenzie says that a lot of Winsupply plumbing locations have found that HVACR is a natural progression in their expansions. “We’re also seeing what we call new startups that are complimentary to a Winsupply [owner] who’s already in that city or town that does some other industries, such as waterworks, plumbing, or electrical,” he says. “I think that is definitely a faster growing piece of our product mix. We certainly continue to look at ways to grow our waterworks business.”

Expansion and technology plans

In April, Winsupply announced it is building a 318,000-square-foot regional distribution center in Oklahoma City, slated to open next year. It will give Winsupply a total of six regional DCs, with the other five locations in Dayton, Ohio; Denver; Middletown, Connecticut; Richmond, Virginia; and Jacksonville, Florida.

“We’re trying to solve a little bit for that ‘Amazon Business’ requirement. We’re trying to solve also for the fact that competitors, like Ferguson, have a very large distribution network,” says McKenzie. “So, we’re very excited about Oklahoma because it really gives us a chance to get even more of our footprint within a day’s delivery of product out of the distribution center.”

The company is drawing up plans for its seventh regional distribution center that McKenzie says will be located West of the Rockies. 

On the technology front, Winsupply recently finished an integration with Conexiom that enables its customers to send an order in via email that can then be automatically converted into a sales order in an ERP system. “That’s huge, because contractors do use email and they do text,” he says. “We’re getting ready to start working on integrations with Shopify, with ServiceTitan and with Payzer. Those are on our roadmap for next year.

“We have some of our own homegrown machine learning developed in our product information system where we’re trying to solve for the question of, ‘Where does a commodity come from?’ … We’ve got that working in the background now in our data content group.”

Winsupply also has artificial intelligence in its e-commerce platform that helps customers select products and add-ons to their sales. By using AI and machine learning, Winsupply is able to provide more efficiencies to its customers while also keeping them closer, according to McKenzie.

Strong internal talent

Earlier this year Winsupply kicked off its scholarship program, the brainchild of McKenzie. The company is investing several million dollars into recruiting, training and promoting future local company presidents. “The whole purpose is to recognize that our people are our greatest asset not on our balance sheet,” McKenzie says. “We want to promote this culture going forward, and I couldn’t think of a better way to spend money and invest wisely than to invest in the leaders of the future.”

In July, 35 local company presidents will head to Winsupply HQ to be considered and approved as the first set of trainers and then be embedded in a local president’s company. McKenzie says they will also go through some rigorous learning management system and classroom training from Winsupply’s training department. 

Once the training department says a person has the knowledge, skills and abilities to be a president, an existing local company president acts as his or her mentor. “Winsupply is paying 100% of the cost because we want to make sure that we develop leaders for the future,” McKenzie says. “Labor shortages are a real issue. It’s hard to find people no matter what industry you’re in. Our approach has now become, ‘Let’s just build people from scratch. Let’s build people who fit our culture, who fit our autonomous structure, who believe in the spirit of opportunity that we believe in.’ That’s what happened to me. I was a kid they hired off the street. They grew me from day one. I feel like this is our way to pay forward that opportunity to many great young people that we’re seeing out in the communities.”